Table of ContentsTeaching Material forthe Course Principles ofAccounting-IAddis Ababa UniversitySchool of CommerceCompiled By: KASSAHUN B.Compiled in October 2006 and Revised in 2010Compiled By: Kassahun B., Lecturer at AAU, School of Commerce, Accounting Department0
Table of ContentsCourse OutlineChapter One:General Introduction1.1Definition of Accounting1.2Evolution of Accounting1.3Profession of AccountancyChapter Two: Accounting Principles and Practices2.1Accounting As Information Systems (Data Processing Methods)2.2Principles And Practices2.3Business Transaction And The Accounting Equation2.4Financial StatementsChapter Three: Accounting Cycle for Service Rendering Businesses3.1Nature And Classification of Accounts3.2Chart of Accounts3.3Flow of Accounting Data3.4Trial Balance3.5Adjusting Process3.6Worksheets For Financial Statements3.7Financial Statements3.8Journalizing And Posting Adjusting3.9Journalizing and Posting Closing Entries3.10Post Closing Trial BalanceChapter Four: Accounting For Merchandising Businesses4.1Accounting For Purchases and Sales4.2Credit Terms, Cash Discounts and Return & Allowances4.3Trade Discount, Transportation Costs And Sales Tax4.4Worksheets For Merchandising Businesses4.5Financial Statements For Merchandising Businesses4.6Adjusting, Closing And Reversing Entries4.7Corrections of ErrorsChapter Five: Accounting for Accruals and Deferrals5.1Accruals- Accrued Assets And Liabilities5.2Deferrals- Prepaid Expenses And Unearned RevenuesChapter Six: Accounting Systems Design6.1Principles Of Accounting Systems6.2Accounting Systems Installation And Revision6.3Internal Control Principles And Structures6.4Special Journals And Subsidiary LedgersChapter Seven: Accounting For Cash and Temporary Investment7.1Control Over Cash7.2Bank Reconciliation7.3Internal Control of Cash Receipts and Payments7.4Short Term InvestmentChapter 8: Accounting for Receivables8.1Classification of Receivables8.2Determination of Interest, Due Date, and Maturity Value8.3Notes Receivables8.4Uncollectible AccountsCompiled By: Kassahun B., Lecturer at AAU, School of Commerce, Accounting DepartmentI
Chapter One:Introduction to AccountingChapter OneGeneral Introduction to Accounting1.1)Definition Of AccountingAccounting is defined as the process of identifying, measuring, recording, classifying,summarizing, analyzing and interpreting economic events (financial transactions) andcommunicating the results thereof to the entities interested in such information to enable themmake informed judgments. The analysis the definition is as follows:Identifying-to distinguish an event or a transaction that must be recorded.Measuring-quantifying an event or a transaction i.e. accounting deals with only thosetransactions and events that can be expressed in terms of money.